A cap on pension charges will not be introduced until April 2015 at the earliest, pensions minister Steve Webb has confirmed.

It emerged last week that the Government's attempts to usher in limits on the amount automatic enrolment pension schemes could levy in management fees by April had failed, with Mr Webb confirming this morning it will be pushed back by a year.

Millions more workers are due to be enrolled into workplace pensions over the next year as medium-sized employers reach their auto-enrolment staging dates.

Blow: Pensions minister Steve Webb had hoped a cap could be introduced by April.

Mr Webb said: 'Nothing in the response to our consultation has changed our view that action is needed to ensure people are not ripped off by excessive pension charges.

'Having listened to feedback from our consultation, we have decided that it would be only right and fair to give employers a minimum of 12 months’ notice of the changes that we will announce.

'We remain committed to delivering value for money for pension savers by tackling high charges in workplace pension schemes. This is particularly important for those workers who are automatically enrolled into a scheme then remain in the default fund.'

The Government had launched a consultation that suggested three charge caps: 0.75 per cent; 1 per cent; or a 0.75 per cent that could rise to 1 per cent if the scheme provider could justify it.

But the consultation was marred when a government scrutiny committee gave it a 'red flag' after calling into question the Department for Work and Pension's views that introducing a cap would have 'net zero affect' on the pensions industry.

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Yvonne Braun, of the Association of British Insurers, said: 'Millions more people are saving into a pension due to the early success of automatic enrolment. It is a sensible decision not to make changes now which would cause disruption at an operationally sensitive time with thousands of new employers setting up schemes and provider capacity already strained.

'Workplace pension charges are now at their lowest level ever, and the ABI's members will continue to focus their efforts on ensuring that auto-enrolled savers get value for money and transparent pensions.'

Angela Seymour Jackson, of Aegon, said that shoehorning restrictions on automatic enrolment schemes by this April would have caused more problems than it solved.

She said: 'Making a success of auto-enrolment is Aegon’s and the Government’s top priority. The decision to defer introducing any price restrictions until April 2015 supports this.

'It will allow employers and providers to get on with enrolling many thousands of employees into workplace schemes, often for the first time.

'Rushing new scheme conditions through at this critical stage would have disrupted many employers’ plans to use good existing schemes. The pensions minister’s decision will avoid employees losing out on valuable contributions while employers made alternative arrangements.'